Second, when they are included in this group, they tend to be left out of traditional credit
scoring models used to underwrite mortgages.
The two main types of
scoring models used by Equifax, Experian, and TransUnion for most lenders are from FICO and VantageScore.
Additionally, there are a variety of different credit
scoring models used to produce credit scores.
Although similar in design,
the scoring models used by each company listed here are said to have their own unique way of determing credit worthiness, and the overall «score» of your credit.
The exact algorithms or
scoring models used are mostly proprietary, so exactly weighting information isn't available.
«The credit
score model used by the GSEs needs to be updated,» writes Laurie Goodman at Urban Institute.
But the calculations
these scoring models use is similar to FICO's, so you'll still get a good ballpark figure.
PRO TIP: Understand that any «free» or credit report YOU can obtain anywhere yourself DOES NOT provide you with the same credit
scoring model used by most lenders.
Many popular credit
score models use something called credit utilization as one of the key ingredients that shapes scores.
Many popular credit
scoring models use the average age of all your credit accounts as one of the metrics that help determine your score.
Listing of factors which negatively influenced the consumer credit score based on
the scoring model used
Scoring models use the following types of credit report information to compute your credit score.
Your only real option is to ask lenders, when they check your credit, what
scoring model they use, and whether or not you can know your score.
Each scoring model uses its own secret formula to predict the likelihood that you'll pay back a loan or credit card as agreed.
Here are a few tips: Understand
the scoring models you use, both those developed in - house as well as those from third - party vendors.
The rate shopping window depends on the credit
scoring model used.
To make things even more confusing, there isn't one single range of possible credit scores: what's considered a «good» score depends on many factors, including
the scoring model used to calculate it.
In response to the need for a measurement of risk that was non biased and separate from the bank, in 1950's FICO (then called Fair Isaac and Company), developed the first credit score but it took over 20 more years to create a successful credit
scoring model using data from the three major Credit Reporting Agencies (CRA).
Under the new Vantage
Score model used by all three bureaus, your credit score (FICO score), is a number between 501 (worst) and 990 (best) that is used to determine a consumer's credit worthiness and potential risk to the lender.
Also, shop different dealers [i.e. other cars] to see what
scoring model they use.
It's also important to understand that unlike a traditional credit score (used by lenders), consumers don't have access to their credit - based insurance score, and that's because there's no single
scoring model used by all insurers (or credit agencies).
The scoring model used to analyse your credit information will determine your credit score.
A quick look at the factors that make up your FICO score, the credit
scoring model used by most lenders, immediately makes clear how easily you can harm your credit with careless credit card use — or help it with responsible actions:
There are many credit
score models used by lenders.
Unfortunately, this provision circumvents their thoughtful review process, which is nearing completion, and instead significantly delays any decision to update
the scoring model used for conforming mortgages,» Joanne Gaskin, senior director at FICO, said in a statement.
However, a medical collection account may not have as a big an impact on your credit score as some other accounts, depending on
the scoring model used.
Pinning down a perfect credit score ultimately depends on which
scoring model you use.
The most common credit -
scoring model used today is Fair, Isaac & Co.'s (FICO).
Not exact matches
Because these lenders
use scoring models designed for either big businesses or individual consumers, they're forced to try to apply their template for individuals to a small business.
At the other end of the spectrum, Mail Boxes Etc.
uses a scale of minus 2 to 2 for each of 20 criteria, which are weighted to arrive at a total
score; Jinwoong, the sporting - goods marketer,
uses an «eight - link chain»
model for managing decisions about potential new products; the links detail the company's strengths in eight areas, such as distribution and in - store merchandising.
These lenders make the loans themselves,
using their own credit
scoring models, and hold the loans on their own books.
No single credit
score or credit
score model is
used by every lender.
This typically leads to a mess of unrelated secondary metrics thrown together
using a
scoring model.
As the Post reported: To develop its psychographic
models, Cambridge surveyed more than 150,000 households across the country and
scored individuals
using five basic traits: openness, conscientiousness, extraversion, agreeableness and neuroticism.
Scores Equifax sold to consumers were based on Equifax's proprietary
model, the Equifax Credit
Score, which is an «educational» credit score that also is typically not used by lenders to make credit decis
Score, which is an «educational» credit
score that also is typically not used by lenders to make credit decis
score that also is typically not
used by lenders to make credit decisions.
Lenders
use an array of credit
scores, which vary by
score provider and
scoring model.
The FICO
score is based on a
model created by Fair Isaac Corporation and is the most commonly
used credit
score.
Many lenders
use the FICO
score model to decide whether to grant homebuyers mortgages.
Credit cards, banks, and sites that offer free credit
scores will likely all
use different
score models from different companies.
On top of that, lenders will
use their own
models of these
scores based on the product they're selling.
The project is detailed in the contract as a seven step process — with Kogan's company, GSR, generating an initial seed sample (though it does not specify how large this is here)
using «online panels»; analyzing this seed training data
using its own «psychometric inventories» to try to determine personality categories; the next step is Kogan's personality quiz app being deployed on Facebook to gather the full dataset from respondents and also to scrape a subset of data from their Facebook friends (here it notes: «upon consent of the respondent, the GS Technology scrapes and retains the respondent's Facebook profile and a quantity of data on that respondent's Facebook friends»); step 4 involves the psychometric data from the seed sample, plus the Facebook profile data and friend data all being run through proprietary
modeling algorithms — which the contract specifies are based on
using Facebook likes to predict personality
scores, with the stated aim of predicting the «psychological, dispositional and / or attitudinal facets of each Facebook record»; this then generates a series of
scores per Facebook profile; step 6 is to match these psychometrically
scored profiles with voter record data held by SCL — with the goal of matching (and thus
scoring) at least 2M voter records for targeting voters across the 11 states; the final step is for matched records to be returned to SCL, which would then be in a position to craft messages to voters based on their
modeled psychometric
scores.
My credit utilization is consistently < 1 % and my
score is well in the 800's, varying based on bureau and
model used.
A lender will opt to
use a particular credit
score model based on their preference and type of transaction being considered.
How much it helps, depends on the particular
scoring model that is being
used, but it's safe to say that a long credit history showing on time payments on various accounts helps, and won't hurt, your credit
scores.
The Sender
Score is derived
using a formula developed by Return Path based on
modeling sending IPs versus their likelihood of engaging in behaviors viewed negatively by ISPs and filtering companies.
For example, an auto lender might
use one
scoring model, while a mortgage lender
uses another.
Currently, Fair Isaac Corp's FICO
score and Vantage are two of the most widely
used scoring models in the country.
There are different credit
scoring models which may be
used by lenders and insurers.
It depends on the individual's unique credit history and the particular
scoring model being
used,» says Griffin.
«The credit
score model the GSEs essentially require mortgage originators to
use for mortgage lending — FICO 4 — is outdated, based on
models estimated in the late 1990s.